Best Foot Forward

The Bill only passed by the narrowest of margins (219 to 212 votes) and was opposed by many leading environmental groups. Greenpeace called it “a victory for coal industry lobbyists, oil industry lobbyists, agriculture industry lobbyists, steel and cement industry lobbyists, among many others.” Friends of the Earth similarly highlighted the hijacking of the complex 1,300 page Bill by big business; “the House of Representatives remains so corrupted by special interests and special interest cronies… that it is thwarting the will of the American people”.

Maybe all is not lost. By publicising the Bill’s serious flaws environmentalists are clearly aiming to secure amendments to the Bill  in the Senate. To have backed the original text would have weakened their case and sent the wrong message to legislators.

As it stands the Bill has so many concessions that it cannot hope to deliver the promised carbon savings; a 17% reduction on a 2005 baseline by 2020 and 83% reductions by 2050. When the scheme is introduced in 2012 a carbon permit will cost an estimated $13 per tonne, the equivalent of adding somewhere between $15 to $40 on to an individual’s annual motoring costs – hardly dramatic.

Arguably, the more fundamental issue is whether a market-based system can effectively deliver change full stop. After all, the EU Emissions Trading Scheme has hardly been a success with carbon prices falling at just the time when they should be incentivising efficiency improvements. Since the damage of one tonne of carbon dioxide remains the same regardless of its market price, isn’t it more appropriate to tax carbon at source rather than leave pricing to the whim of the market?

Most leading environmentalists agree. It is the politicians who need convincing.